NEWSLETTER
Investing.com — The rally in tech stocks isn't likely to end anytime soon, as the upcoming quarterly earnings season will highlight the next phase of the artificial intelligence revolution beyond the hardware needed to power ai, adding additional strength to the current bull market. run.
“We believe first-quarter earnings will be a major positive catalyst for the tech sector and expect tech stocks to rise another 15% over the year, adding to the strong start to 2024,” Wedbush analysts said in a note. , directed by Daniel Ives.
The technology growth story seen in the market's current bull run has been driven by the promise of ai, with much of the focus on hardware, including semiconductors, to provide the computing power needed to build ai models like ChatGPT. . While hardware makers, mostly Nvidia (NASDAQ ), have been hoarding ai investment dollars, now comes the next gear of growth for this coveted technology: the software phase.
Business spending on ai and related purchases will likely rise 8% to 10% in 2024, Wedbush estimates, eclipsing the less than 1% seen in 2023, ushering in a wave of dollars that will likely benefit companies in areas key as software, cybersecurity, digital advertising, and semis of the ai value chain.
Microsoft Corporation (NASDAQ:), Alphabet Inc Class A (NASDAQ:), amazon.com Inc (NASDAQ:), Palantir Technologies Inc (NYSE:), Meta Platforms Inc (NASDAQ:) with our favorite cybersecurity names Zscaler Inc. (NASDAQ:), CrowdStrike Holdings Inc (NASDAQ:), Palo Alto Networks Inc (NASDAQ:), Cyberark Software Ltd. (NASDAQ:), Checkpoint Therapeutics Inc (NASDAQ:), and Tenable Holdings Inc (NASDAQ ) are expected to be a standout performer in the upcoming first-quarter earnings season, Wedbush said.
“We see many incremental budget dollars now going into the software/development phase of ai, which should be a major focus of upcoming Q1 conference calls,” he added.
However, Microsoft is likely to remain head and shoulders above the rest, as demand for its Azure cloud platform will be driven by an acceleration in the adoption of generative ai and Microsoft Copilot as cases of use of ai, adding between 25,000 and 30,000 million more dollars. Wedbush, to the tech giant's revenue by 2025.
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